Creating the Microsoft Dynamics 365 Partner of the Future Microsoft Worldwide Partner Conference 2016 5/20/2018 5:01 AM CE141 #WPC16 Creating the Microsoft Dynamics 365 Partner of the Future Jeff Edwards Director, Channel Strategy © 2016 Microsoft Corporation. All rights reserved. MICROSOFT MAKES NO WARRANTIES, EXPRESS, IMPLIED OR STATUTORY, AS TO THE INFORMATION IN THIS PRESENTATION.

Partner of the future Dynamics Partner Customer Leads with the Cloud Offers a comprehensive solution Telephony ERP CRM - Customer Engagement Deeply understands customers’ business processes Document Management & Workflows Owns customers’ technology strategy Dynamics Partner Office 365 Owns solution integration and validation Customer BI, IoT, Dashboards Owns the billing relationship Business Consulting Mobile Access Offers managed services including support

However…. We were not making it easy Microsoft Worldwide Partner Conference 2016 5/20/2018 5:01 AM However…. We were not making it easy Different pricing models Different licensing models Inconsistent depth of integration Silos focused on product categories © 2016 Microsoft Corporation. All rights reserved. MICROSOFT MAKES NO WARRANTIES, EXPRESS, IMPLIED OR STATUTORY, AS TO THE INFORMATION IN THIS PRESENTATION.

Microsoft Worldwide Partner Conference 2016 5/20/2018 5:01 AM The digital world A New Unified Approach to Business Applications Sales PowerApps Flow Marketing Comprehensive business processes Start with just what you need  Office 365 integration PowerApps and Flow included  Intelligence built-in CRM ERP Microsoft Dynamics 365 Project Service Finance Field Service Operations Customer Service © 2016 Microsoft Corporation. All rights reserved. MICROSOFT MAKES NO WARRANTIES, EXPRESS, IMPLIED OR STATUTORY, AS TO THE INFORMATION IN THIS PRESENTATION.

The Cloud Solution Provider (CSP) Program Worldwide Partner Conference 2015 5/20/2018 5:01 AM The Cloud Solution Provider (CSP) Program Dynamics CRM Online Enterprise Mobility Suite Microsoft Azure Office 365 Dynamics ERP Microsoft continues to expand the CSP program to more partners with access to new cloud services, more markets and new capabilities. Partners own the end-to-end customer lifecycle with direct provisioning, billing and support of Microsoft cloud services. Partners create the offer, set the price and own the billing terms with their customers. Sell Integrated Offers and Services Own and Control the Billing Provision, Manage and Support ** Dynamics AX coming soon! © 2015 Microsoft Corporation. All rights reserved. MICROSOFT MAKES NO WARRANTIES, EXPRESS, IMPLIED OR STATUTORY, AS TO THE INFORMATION IN THIS PRESENTATION.

CSP business models Microsoft Microsoft CSP Indirect Provider MBS 5/20/2018 CSP business models Direct Channel Indirect Channel Microsoft Microsoft CSP Indirect Provider CSP Direct Partner CSP Indirect Reseller Unmanaged Reseller Customer Customer © 2013 Microsoft Corporation. All rights reserved. Microsoft, Windows, and other product names are or may be registered trademarks and/or trademarks in the U.S. and/or other countries. The information herein is for informational purposes only and represents the current view of Microsoft Corporation as of the date of this presentation. Because Microsoft must respond to changing market conditions, it should not be interpreted to be a commitment on the part of Microsoft, and Microsoft cannot guarantee the accuracy of any information provided after the date of this presentation. MICROSOFT MAKES NO WARRANTIES, EXPRESS, IMPLIED OR STATUTORY, AS TO THE INFORMATION IN THIS PRESENTATION.

CSP business models – Dynamics 365 MBS 5/20/2018 CSP business models – Dynamics 365 Direct Channel Indirect Channel Primary approach for existing Dynamics partners Only recommended approach for Dynamics AX – with a few caveats Familiar approach for the business applications market Opportunity to expand the Dynamics 365 business into the Office 365 channel New business models and innovative offerings © 2013 Microsoft Corporation. All rights reserved. Microsoft, Windows, and other product names are or may be registered trademarks and/or trademarks in the U.S. and/or other countries. The information herein is for informational purposes only and represents the current view of Microsoft Corporation as of the date of this presentation. Because Microsoft must respond to changing market conditions, it should not be interpreted to be a commitment on the part of Microsoft, and Microsoft cannot guarantee the accuracy of any information provided after the date of this presentation. MICROSOFT MAKES NO WARRANTIES, EXPRESS, IMPLIED OR STATUTORY, AS TO THE INFORMATION IN THIS PRESENTATION.

CSP business models – Dynamics 365 MBS 5/20/2018 CSP business models – Dynamics 365 Direct Channel Indirect Channel Primary approach for existing Dynamics partners Only recommended approach for Dynamics AX – with a few caveats Familiar approach for the business applications market Opportunity to expand the Dynamics 365 business into the Office 365 channel New business models and innovative offerings Partners have the choice of one or the other…. Or both! © 2013 Microsoft Corporation. All rights reserved. Microsoft, Windows, and other product names are or may be registered trademarks and/or trademarks in the U.S. and/or other countries. The information herein is for informational purposes only and represents the current view of Microsoft Corporation as of the date of this presentation. Because Microsoft must respond to changing market conditions, it should not be interpreted to be a commitment on the part of Microsoft, and Microsoft cannot guarantee the accuracy of any information provided after the date of this presentation. MICROSOFT MAKES NO WARRANTIES, EXPRESS, IMPLIED OR STATUTORY, AS TO THE INFORMATION IN THIS PRESENTATION.

MPN Competency Evolution 5/20/2018 5:01 AM MPN Competency Evolution Transition from To A differentiated approach based on the Cloud maturity of each respective market CRM Competency based on either on-premises or Cloud revenue/seats, exams and customer references Cloud CRM Competency Packaged, repeatable solutions via unique industry IP Cloud CRM Competency based on Cloud assigned seats, exams and customer references ERP Competency based on on-premises revenue, exams and customer references ERP Competency based on on-premises or cloud performance © 2014 Microsoft Corporation. All rights reserved. MICROSOFT MAKES NO WARRANTIES, EXPRESS, IMPLIED OR STATUTORY, AS TO THE INFORMATION IN THIS PRESENTATION.

MPN Competency Evolution 5/20/2018 5:01 AM MPN Competency Evolution Transition from To Dynamics 365 Competency Impacts To be determined Appropriate time to transition Rich and expanding training offerings on the connected solution CRM Competency based on either on-premises or Cloud revenue/seats, exams and customer references Cloud CRM Competency Packaged, repeatable solutions via unique industry IP Cloud CRM Competency based on Cloud assigned seats, exams and customer references ERP Competency based on on-premises revenue, exams and customer references ERP Competency based on on-premises or cloud performance © 2014 Microsoft Corporation. All rights reserved. MICROSOFT MAKES NO WARRANTIES, EXPRESS, IMPLIED OR STATUTORY, AS TO THE INFORMATION IN THIS PRESENTATION.

Microsoft Dynamics Industry Partner Program Support the transformation of the channel to cloud-based, repeatable vertical solutions Includes both CRM and AX partners – expanding to NAV/GP in the coming year Provides clarity to the field and prospects by clearly identifying our most qualified partners by vertical Provides training, recognition, a logo/brand and leads to the partners that qualify for the program Increases opportunity pipeline and win rates while reducing sales cycle times >100 partners worldwide

Microsoft AppSource One destination for business users to discover, trial, and acquire line-of-business apps Simplifies the discovery, trial, and acquisition of line-of-business apps An ecosystem to help business users get started using apps faster Helps business users do more with their existing Microsoft apps

Focus drives results Vertical Strategy Cloud Services Mobile Workforce Professional Services (AEC, Accounting & IT Consulting) Manufacturing (Industrial Equipment & Life Sciences) Cloud Services Dynamics 365 (CRM) Azure Mobile Workforce Use-case solutions (Activity Buddy, Colleague, Attendee, etc.)

Industry/Segment strategy Turn business away that is not strategic We don’t chase Financial Services deals We refer out SMB deals to other partners Focus 100% of our marketing efforts on Industry Events, branding, digital marketing, inside sales Subject matter experts Sales Delivery

Cloud transformation Live and breath the cloud All internal development is on Azure O365 deployed internally Targeted marketing to legacy on-prem customers Cloud transformation offerings Strategic selling cycles with Microsoft (create incentives to move) “Cloud Only” mentality All new projects are Cloud

Mobile first Consumption depends on the Mobile strategy Mobile drives maximum adoption and usage Mobile development is “use-case” specific Dynamics 365 addresses the Macro needs Mobile development should address the Micro needs Mobile IP can be horizontal Identify needs that all your Dynamics 365 customers require

Should we invest in a vertical strategy? Our Experience Two successful vertical efforts (small markets) Over 45,000 seats of Dynamics CRM 4 Partner of the Year Awards Our Methodology 100% Focus on A/E/C and Legal Pre-configured industry IP (repeat, repeat and repeat) Pre-built data synchronization and harvesting tools Best Practices for Business Process and Implementation Benefits of Approach Industry recognition, acceptance and momentum Ability to complete (win percentage and speed to win) Implementation success and referenceability REAL $$$ VALUE! (recurring revenue and leverage)

Why do you win with a vertical sales process? What are customers in these vertical markets asking for? Do I have a partner that understands my business? Does Microsoft have solutions that fit my business? How can I reduce my investments cost(s)? How can I reduce my risks? How can I leverage all the data that I have in house? How can I get my users to actually use the system? How can I leverage the investments we have made in technology?

Vertical Strategy: “Win – Win – Win” Microsoft Win(s) Industry partner drives new opportunities Compete more effectively against the bad guys Larger number of seats per install and expansion Longer on-going relationship (vertical stickiness) Clients Win(s) Speed to install (time to value) Reduced cost of delivery and implementation Less risk Higher user adoption Partner Win(s) Quicker Wins against less viable competition Highly differentiated approach Reduced pressure to discount More deal revenue: (CSA, application layer, Services and On-going support)

Deepening Your Relevance – Increasing Your Win Rate 5/20/2018 5:01 AM Deepening Your Relevance – Increasing Your Win Rate 20/50/80 © 2014 Microsoft Corporation. All rights reserved. MICROSOFT MAKES NO WARRANTIES, EXPRESS, IMPLIED OR STATUTORY, AS TO THE INFORMATION IN THIS PRESENTATION.

Agenda: Dynamics Partner Incentives Worldwide Partner Conference 2015 5/20/2018 5:01 AM Agenda: Dynamics Partner Incentives FY17 Partner Incentives Strategy Cloud Solution Incentives On Premise Solution Incentives © 2015 Microsoft Corporation. All rights reserved. MICROSOFT MAKES NO WARRANTIES, EXPRESS, IMPLIED OR STATUTORY, AS TO THE INFORMATION IN THIS PRESENTATION.

FY17 Partner Incentives Strategy 5/20/2018 5:01 AM FY17 Partner Incentives Strategy Cloud-First strategy Simple and stable Make incentives easier Drive usage © 2014 Microsoft Corporation. All rights reserved. MICROSOFT MAKES NO WARRANTIES, EXPRESS, IMPLIED OR STATUTORY, AS TO THE INFORMATION IN THIS PRESENTATION.

Dynamics Cloud Solution Incentives Continue to deliver solution selling incentives Optimize for EA and CSP Introduce Online Services Usage incentive Retire OSA – Manage incentive

OSA Sell – Partner Incentive for EA Timeline Overview Microsoft Worldwide Partner Conference 2016 5/20/2018 5:01 AM OSA Sell – Partner Incentive for EA Timeline Overview July - Oct Nov-Dec H2FY17+ CRM OL Sell & Manage Sell & Manage Sell & Usage AX Cloud Sell Sell Sell & Usage Dynamics 365 Plans, Sales and Operations Sell Sell & Usage Dynamics 365: Rest of Apps Sell Sell &Usage as available © 2016 Microsoft Corporation. All rights reserved. MICROSOFT MAKES NO WARRANTIES, EXPRESS, IMPLIED OR STATUTORY, AS TO THE INFORMATION IN THIS PRESENTATION.

OSA Sell – Partner Incentives for EA Worldwide Partner Conference 2015 5/20/2018 5:01 AM OSA Sell – Partner Incentives for EA Consistent incentive rate and structure as Dynamics transitions packaging to Dynamics 365 CRM Online Dynamics AX Microsoft Dynamics 365 Enterprise Edition Plan 2 Plan 1 Operations Incentive Other Apps Sell* 26% 65% 65% 26% Usage** 10% 10% 10% 10% *Based on 12 months billed revenue **Usage Incentive is coming in H2FY17 © 2015 Microsoft Corporation. All rights reserved. MICROSOFT MAKES NO WARRANTIES, EXPRESS, IMPLIED OR STATUTORY, AS TO THE INFORMATION IN THIS PRESENTATION.

CSP– Partner Incentives Worldwide Partner Conference 2015 5/20/2018 5:01 AM CSP– Partner Incentives CSP incentives for Dynamics 365 are consistent with AX and CRM incentives CRM Online Dynamics AX Dynamics 365 Enterprise Edition Dynamics 365 Business Edition Plan 2 Plan 1 CSP Incentive Operations Other apps Financials App Direct Discount Rebate 25% 8% 30% 8% 30% 8% 25% 8% 30% 8% Indirect Reseller Discount Rebate * 8% * 8% * 8% * 8% * 8% *Discount provided by the Indirect Distributor © 2015 Microsoft Corporation. All rights reserved. MICROSOFT MAKES NO WARRANTIES, EXPRESS, IMPLIED OR STATUTORY, AS TO THE INFORMATION IN THIS PRESENTATION.

On Premise Solution Incentives Microsoft Worldwide Partner Conference 2016 5/20/2018 5:01 AM On Premise Solution Incentives SPA CSA Tier Mature Market Threshold Emerging Market Threshold License Discount A $1M $500K 50% B $250K 45% C $100K $50K 40% D $0 20% Product Line Mature Market Threshold Emerging Market Threshold License Incentive Rate* AX $250K $125K 35% CRM (July 2016 – April 2017) $0 12% (From May 2017-) $100K $50K License Incentive Rates will be reduced in FY18 Software Assurance only fee will remain unchanged at 5% FY17 Top partner License Incentive Rate AX in EA Partners ($1.3M + USD) 40%: CRMOP Partners ($2.5M + USD) 14%. FY17: Top SPA-Only Partners ($4M+ USD): 55% License Discount Enhancement Plan incentives remain unchanged © 2016 Microsoft Corporation. All rights reserved. MICROSOFT MAKES NO WARRANTIES, EXPRESS, IMPLIED OR STATUTORY, AS TO THE INFORMATION IN THIS PRESENTATION.

2007 America’s Cup Winner – Swiss Team Skipper – Brad Butterworth

Today’s America’s Cup Winner – New Zealand Team Skipper – Peter Burling

Recommendations Take an end-to-end vertical approach 5/20/2018 5:01 AM Recommendations Take an end-to-end vertical approach Sell the cloud – opens up your opportunity, fully leverages Microsoft Expand and strengthen your solution offerings – Microsoft technologies that will be easier to sell, install and integrate than ever before Build new IP using Dynamics platforms, PowerApps and Flow to deepen your relevance and differentiation to prospects and customers Validate and promote your new solutions in AppSource for maximum market exposure and quality assurance © 2014 Microsoft Corporation. All rights reserved. MICROSOFT MAKES NO WARRANTIES, EXPRESS, IMPLIED OR STATUTORY, AS TO THE INFORMATION IN THIS PRESENTATION.

5/20/2018 5:01 AM The channel remains our critical route to market and competitive advantage – we do not win if you do not win © 2014 Microsoft Corporation. All rights reserved. MICROSOFT MAKES NO WARRANTIES, EXPRESS, IMPLIED OR STATUTORY, AS TO THE INFORMATION IN THIS PRESENTATION.

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5/20/2018 5:01 AM © 2014 Microsoft Corporation. All rights reserved. MICROSOFT MAKES NO WARRANTIES, EXPRESS, IMPLIED OR STATUTORY, AS TO THE INFORMATION IN THIS PRESENTATION.

Expanding your Offerings, Revenues and Profits 5/20/2018 5:01 AM Expanding your Offerings, Revenues and Profits Reiterate Satya’s key points from July 6th release Offering shift from independent silos to seamlessly integrated solutions delivered via Azure Sales, licensing, deployment, management and upgrades of the solution will reflect this shift It will be easier for the partner to deliver, and more compelling for the customer to buy, than ever before Microsoft is truly bringing all of its weight to bear fully behind business applications – the point of the spear The channel remains our critical route to market and competitive advantage – we do not win if you do not win © 2014 Microsoft Corporation. All rights reserved. MICROSOFT MAKES NO WARRANTIES, EXPRESS, IMPLIED OR STATUTORY, AS TO THE INFORMATION IN THIS PRESENTATION.